OREANDA-NEWS. Chevron's 8.9mn t/yr Wheatstone LNG project in Western Australia (WA) could be delayed because of the late delivery of modules.

Chevron is still targeting first LNG from Wheatstone by the end of 2016, but the schedule is under pressure because of the delayed delivery of modules from a fabrication yard. The firm has expanded to an additional yard and increased oversight at the fabricator's yard in an attempt to put the project back on track.

Chevron is also struggling to start its 15.6mn t/yr Gorgon LNG project in WA on time, warning last week that first LNG production could slip to 2016 from its target of late this year. And the likelihood of a delay at Gorgon could increase this week as more than 1,000 contractors vote on whether to take industrial action over work rosters. The ballot, which covers workers from three prominent WA unions, opens on 5 August and will run for two weeks. Unions will have to give three days' notice to Chevron's contractor CB&I before taking industrial action.

Any industrial action would be focused on Gorgon, but the unions have also targeted Wheatstone in the past as many work practices overlap between the projects.

Australian independent Woodside last year bought a 13pc stake in Wheatstone from US independent Apache. Woodside saw the deal as an opportunity to sell uncontracted LNG and potentially gain marketing leverage for longer-term contracts from its Browse LNG project in WA. But a slow startup at Wheatstone could mean the large majority of the project's early cargoes would be used to meet contracted demand. Woodside said late last year it would likely have access to a couple of cargoes a year of uncontracted LNG for spot sales to clients that want that flexibility, with 80pc of Wheatstone production sold so far. But any delay could remove spot availability for the first year or two of operations.

Wheatstone has 20-year supply contracts with Japanese state-controlled utilities Tokyo Electric Power (Tepco) for 3.1mn t/yr, Chubu Electric Power for 1mn t/yr, Kyushu Electric Power for 700,000 t/yr and Tohoku Electric Power for 900,000 t/yr.

Wheatstone is a joint venture between Chevron with 64.14pc, Woodside with 13pc, Kuwait's state-owned KPC with 13.4pc, Tepco with 8pc and Kyushu Electric Power with 1.46pc.